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                                        100 N.J.L.J. 90
                                        February 3, 1977


Appointed by the New Jersey Supreme Court


Attorney-Client Privilege Revealing
Client's Resources to Welfare Agency

    Two similar inquiries have been received. In the first, the inquirer states:
            A woman came into my office who had been injured when she fell on a flight of stairs. She was walking up the steps and slipped on a piece of banana. This individual was on welfare. Welfare has paid all medical bills up to this point. This included a week's stay in a hospital.

    The inquirer has conducted only the initial interview with this woman. He gives no other facts, but asks (1) whether he is under a duty to advise the client to notify "Welfare" of the claim, and (2) whether he must inform "Welfare" of the claim if the client objects.
    In the second inquiry a county legal aid society referred a matrimonial client to an attorney because it had a conflict of interest with the client's wife. In his application to the legal aid society the client had represented that he had no property and was on welfare. The inquirer discovered in his first interview that the client had a substantial equity in certain real estate which he had conveyed to relatives to avoid foreclosure. The inquirer recommended that the conveyance be set aside and the property be sold so the client could recover his equity. The client promised to obtain certain information needed to proceed but the inquirer never again heard from him. Suspecting that the client had misstated his assets to obtain welfare benefits, the attorney asks whether he may properly disclose to the county prosecutor the client's identity and the facts set forth.
    Ordinarily a lawyer is prohibited from revealing the confidences and secrets of his client and from using them to the client's disadvantage. DR 4-101. Moreover, DR 7-101(A)(3) provides that a lawyer may not knowingly "[P]rejudice or damage his client during the course of the professional relationship, except as required under DR 7-102(B)."
    DR 7-102(B)(1) provides:
        (B)    A lawyer who receives information clearly establishing that:

            (1)    His client has, in the course of the representation, perpetrated a fraud upon a person or tribunal shall promptly call upon his client to rectify the same, and if his client refuses or is unable to do so, he shall reveal the fraud to the affected person or tribunal."

    We find that the meager facts presented by these inquiries fall short of "clearly establishing" that either of the individuals who consulted the respective inquirers "has, in the course of the representation, perpetrated a fraud upon a person or tribunal," and therefore hold that DR 7-102(B)(1) does not apply.
    However, this is not to say that a client's relationship with a welfare agency coming to the attention of the lawyer will in every case, be protected as a "confidence" or "secret" under DR 4- 101 or as shielded information under DR 7-101(A)(3). The welfare statutes demand of the welfare recipient full initial and continuing disclosure of current financial resources. See, for example, N.J.S.A. 2A 111-2, 2A 111-3, 44:1-95, 44:4-91, 44:4 91.1, 44:8-140, 44:10 1 and 44:13-10. See also New Jersey Department of Institutions and Agencies, Division of Public Welfare, Publications PA-51 (1175) and PA-197 (7/75). Thus, it is entirely conceivable that, under some states of facts, a continuing failure by welfare recipient to report to the agency a potentially valuable claim which he or she possesses might constitute a reportable fraud under DR 7-102(B)(1).

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